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September 9, 2013

20 Best & Worst States for Pension Funding

After the Great Recession, some state public employees find their retirement plans imperiled while others are doing fine

From the California redwoods to the Rhode Island coast, the sorry state of many public pensions funds has been in the news since the market crashed in 2008.

State and municipal workers who were assured of guaranteed benefits find their retirement plans in peril as they fight a rising tide of anger from politicians and the public.

In California, proposed changes to CalPers, the largest state pension fund in the country, have been fought by unions who argue their collective bargaining rights are being broken. In Rhode Island, workers in the small town of Central Falls saw the Legislature slash their benefits. And in Detroit, where the city has filed for bankruptcy protection, workers are fighting pension changes in the courts.

Taxpayers everywhere are concerned about whether they will be on the hook to make up for losses incurred by pension funds. In Illinois, lawmakers have been wrestling with how to shore up the fund for two years.

We decided to take a look at how the best and worst states’ public pension funds are faring. We ranked them from the worst to the best based on the percentage of liability that is funded.

We also looked at the dollar amount of unfunded liability and three categories­: Debt & Pensions, State Debt and Unfunded Pensions, expressed as per capita share. A fourth category shows the liability as a percentage of personal income.

The data is from Standard & Poor’s and Fitch Ratings as rendered by CNBC.com.